The Financial Crisis Is Far From Over

I appreciate what I learned from subscribing.  I don’t think that one can understand what this site is all about without subscribing.  It was worth it, and nominal of course.  But month after month may not be worth it for those of us still struggling on the preparation curve.  A lot of the financial advice is not yet relevant – hopefully if there is enough time it will be.   And it hasn’t changed much (see above).
When I first discovered this site I was also into critiques because it was a valid way of evaluating and integrating the material into my own frame of reference.  This is why posters like Sofistek should be given some slack.  I believe, from my own experience, this is hard for many people to do.  I also have sent this site’s address to a lot of people and got few responses and out of those most were negative.  I don’t believe that most of the people I sent the address to did any evaluating at all.

I also don’t believe in sycophantic posturing – but I’m not referring to anyone here :slight_smile:

And i have a story.  A friend of mine has a friend who was already into reading a lot of similar material.  My friend debated whether to share this site with him and asked a Professor who knew his friend.  The Professor looked at this site and responded with no, don’t share it because the friend will likely go off the deep end.  True story and I don’t understand it either.

 

I found this site a few weks ago. I have always known something was very wrong with our economy and Chris was the first to summarize it all so it makes sense, and present some real solutions you can work towards. I have since moved on to learn more about the financial system from other sites, and I’ll probably enroll in this one too. I recommended this site to a few people and encouraged them to take the coming economic collapse seriously. Mostly I get ridiculed. Every once in a while in my life I get insight into some aspect of human psychology that really makes you realize how easily we can dupe ourselves into believing ridiculous things or deny reality. I think many people are so fearful of the implications that they simply dismiss it, they don’t want to think about it, or just take the attitude that whatever happens happens, or they believe that somehow the government will be able to save them. They have never lived through economic hardship and simply can’t fathom what it means to no longer have any money (I haven’t been through it either, but I won’t deny its possibility). One friend (my landlord, I rent downstairs in his house) is even contemplating buying yet more real estate. He has his own very successful retail business, plus 4 houses. All 4 houses are on a mortgage, being paid for by rent. Very risky. I am in Canada so the collapse may not be so severe up here, but he stands to lose all of his houses. When I told him of the imminent collapse, he immediately pulled out his calculator and figured out how much his rents would go down, under the erroneous assumption that THERE STILL WOULD BE A CURRENCY!!! Even though I currently live in his basement, I may end up coming out of this wealthier than him, sadly.
I no longer discuss this with people because everyone is in denial (apparently they don’t have any experience with credit card debt). It’s truly sad, and it is this folly which has gotten us all into this situation in the first place. All I can do is try to help them when everything collapses, assuming of course that I will be able to. Thankfully my mother is taking this seriously. I am a late comer to this game, only taking concrete actions very recently. But it seems that I got in in time.

I Don’t live in the United States and am a paid subscriber.  Have been for well over a year.
The main reason I stay on is due to Erik’s input.  If you pay a one month subscription and go back over time you will see “dry” periods in Chris’s blog posts. There have been times over the past year when I’ve thought that this site has been poor value for money. Its been a close call as to whether I stayed on or not.

During the events of the past two weeks the frequency of Chris’s posts has increased and I have found them to be extremely well written and thought provoking. And reminded me why i became a paid subscriber.

Chris runs a model where enrolled members get free stuff. And paying subscribers get extra.  Try the paid sub for a month and see whether it gives any value.  review some of the older paid for stuff.  And you can get to see some more of Erik’s posts on the paid for side.

Be aware that when the black/grey/white swans are hiding, the number of posts by Chris may be less frequent. When they appear to be in close proximity his posts are more frequent.

Having said all that, my impression of Chris’s focus, along with Erik’s,  is VERY much US based.  With respect to strategies towards the financial markets for investors in other countries the focus is very much on US markets. Erik T may live outside the US, but he trades in the US markets. You are likely to need to follow a site based in/on the region you live in for your local finance flavour. But it makes sense to keep track of what is going on in the major markets.

Having read both Eriks and sofistek’s posts I believe Erik over-reacted.  I failed to see what could have set the blood-level to boil and Erik’s post reads like  a brain snap. Everyone has choices.  If i was choosing which of sofsitek and Erik  acted like a large three year old, my vote would be with Erik.  Which surprises me, given the deep and lucid posts he has written over the past year or so.  Just goes to show none of us are perfect. 

A Free forum that I follow is Green Energy Investors. Like this forum, I rarely post, as i am very much in the mode of trying to untangle what is going on. Drbubb has a few useful views and gives a running commentary on his trading posture. Up to this time, I have never made an investment based on information from that site. I use it purely as a tool, like this site, to try to understand what is going on in the world. So if you are looking for another place to gather information from, I can recommend that site.

Most of the subscribers from that site seem to be UK based. So it is useful for a non-US person to get a European view (Drbubb’s site) as well as a US centric view (this site)

Having just renewed my subscription to this site for 3 months, i have now gone and turned off the automatic resubscribe. this action is based solely on Erik’s post making me question the value of the subscription to the site. And to give Erik a reminder of why sometimes it pays to be civil.

I’ll make a conscious decision on whether to continue after this order expires.

Chris might be right in some cases.  If Erik had been a little more civil I wouldn’t have turned off automatic resubscription.

I’ve sat on this post for over an hour before posting.

Feel free to fire back Erik.

Wow this all seems odd to me LOL. No matter where one lives Gold looks like a pretty  good way to preserve what one has worked so hard for in ones life (hope that doesn’t sound too GREEDY LOL). Chris has been way ahead of the curve pointing this out. Just this advice alone should have made this site well worth it.
It looks quite obvious to me that Chris has provided an honest site full of facts & information to help us protect ourselves & families for what may be very troubling times. He provides his full attention to this which is more than a full time job but he still needs to feed his family also.

Chris seems to thrive on being a researcher & analyst while not having any hidden agendas that I could ever see. Find me a more honest approach to good solid info & integrity and I would be first inline there.

The one thing that makes Chris so unique IMHO is he has not been brain washed with a PHD in economics. His approach is truly different IMHO & this fits perfect for me since our current “predicament” is truly different I believe.

Sorry Chris I didn’t mean to over toot your horn & I am not trying to be a salesman here either. It is what it is & if people can not see it for this they are going to have a very difficult time with what many see lying ahead.

So the value of this site is questionable due to a single post?  And you’re going to “punish” Chris by dangling the threat of withdrawal of your subscription due to one thing Erik wrote in a moment of exasperation despite many, many other posts that Erik’s written of considerable value and interest?  Hmm …

May I suggest the following reading: http://home.tiac.net/~cri/1999/logic101.html

Hello Gibber:
I have 20 blogs in my RSS reader. CM’s is my favorite. I was emailed CM’s CC link on resource depletion by Buffett’s college friend and one of his first original investors, it was followed by a former governor’s email raving about CM’s CC. It was at a time when I didn’t trust blogs. Boy, that endorsement changed that fast! This guy I hold in very high respect. Calling him brilliant would be an insult.

I find the information invaluable. More, less is often better. Some bloggers toss junk up everyday. While you think you are getting a lot they are just burning themselves out to provide daily content. I don’t think CM has wasted my time with one of those reads. He is, like he says: A faithful scout.

Like you, I find the comments section fascinating and informative. I am amazed at the wealth of information that gets discussed by other bloggers in the comment section, many times expanding on the article or correcting my first impression.

There are some seriously smart people in this community, ET is certainly one of them. Best, many have advanced degrees and common sense. They come from all walks of life. Super community.

Calling someone a dick in a heated conversation doesn’t follow CM’s community guidelines. Not that I’m one to judge, thankfully Ben Bernanke and Geithner aren’t members or my @ss would have been tossed years ago for calling them morons each and every day I post. You see, unlike Machinehead I don’t have such an eloquent grasp of the English language. He calls them morons or worse but does it without using the m word. I find this fascinating. Sometimes I even regret not going to college to become an English major.

I do have a question for you about you calling (directly or indirectly) ET a big 3 year old: Is that much different than him calling someone a Dick?

My 2 cents, this blog is very tolerant of everyones opinions. There are going to be times when the one opinion is worded such that it just causes a rub. God knows, I’ve been there.

Personally, if this was my blog, and it isn’t, I’d issue a refund anyone holding a gun to my head. It isn’t ET’s blog and I’m sure he truly wants the best for CM, but don’t you think you might be putting him in an awkward position by calling him a 3 year old and holding a gun to CM’s head based on how ET responds to a post that upsets him?

Just a question.

PS: Personally I’d rather have ET uncaged so I don’t have to guess what he is driving at, if the guy is walking on eggshells it is going to detract from the content he provides. By the way, don’t go to Jim Quinn’s site, he calls anyone who disagree with him an @sshole. But by not visiting his site I assure you you’d miss some really awesome diamonds.

I think this is just the blogoshpere, CM’s home is very well mannered compared to many but even the toughest beat Dennis Kneale, Jim Cramer, Maria I can’t stand her voice Bartawhatever and the rest of CNBS.

 

 

This is long but IMHO really worth the time to watch.

Maria I can't stand her voice Bartawhatever and the rest of CNBS.
This place is always good for a great laugh.....LOL.....Classic Davos.....LOL

[quote=idoctor]
This is long but IMHO really worth the time to watch.

Maria I can't stand her voice Bartawhatever and the rest of CNBS.
This place is always good for a great laugh.....LOL.....Classic Davos.....LOL

[/quote]Hi iDoctor. Great watch, I think I saw you post it on another thread a few days ago. Really super. All the videos you find are right up my alley. Take care.

Here’s another good video with Taleb.
http://www.youtube.com/watch?v=OVxcDgfTzuk

[quote=Erik T.]

Funny, I guess we all have our own definitions of greed.

I would have said that all the self-righteous, entitled, whining crybabies around this site who make specious arguments for not being paid enrolled members such as “but I don’t live in the United States” are the greedy ones, just for having the sheer audacity to first come and collect all the FREE content they possibly can, then to whine and complain about how part of what Chris does involves looking out for the financial interests of his family.

sofistek, if you want to understand greed, look in the mirror. You’re a regular reader of these forums, a benefactor of the Crash Course, and yet another whiner who’s too cheap to support Chris and his work with a paid enrolled membership. I don’t live in the United States either and I find nothing about the enrolled member content specific to U.S. residents, so I reject your excuse for the specious drivel it really is. If you want to be greedy and TAKE TAKE TAKE while giving nothing in return, that’s fine. Chris enjoys helping people and doesn’t mind your shameless greed. But for crying out loud, quit whining about it. You come across like a two year old and your entitled, self-righteous attitude along with your presumptuousness to criticize Chris when you don’t even pay your way for being here is offensive. In short, put up or shut up. Grow up comes to mind as well.

Erik[/quote]

[quote=Gibber]

Having read both Eriks and sofistek’s posts I believe Erik over-reacted.  I failed to see what could have set the blood-level to boil and Erik’s post reads like  a brain snap. Everyone has choices.  If i was choosing which of sofsitek and Erik  acted like a large three year old, my vote would be with Erik.  Which surprises me, given the deep and lucid posts he has written over the past year or so.  Just goes to show none of us are perfect. 

Having just renewed my subscription to this site for 3 months, i have now gone and turned off the automatic resubscribe. this action is based solely on Erik’s post making me question the value of the subscription to the site. And to give Erik a reminder of why sometimes it pays to be civil.[/quote]

I find meta-discussions tedious Gibber, but if you fail to see what could have set the blood-level to boil perhaps you should review sofistek’s post as well as the other replies to it that are 100% unsupportive of those comments.

Frankly all three of you are acting like 3 year old’s. Sofistek whines, Erik says sofistek is like a greedy whining kid and you Gibber essentially say you’ll take your ball and go play elsewhere.

Ai yi yi…
For the record, I don’t begrudge anyone who chooses not to continue enrolled (paid) membership. We all have to decide what’s important to us and how to spend our money. Neither do I begrudge those who choose to simply avail themselves of all the wonderful free content that’s available to everyone. Chris makes the choice to give that content away, and there’s nothing wrong with taking that which is free for the taking. What I find offensive is when people take the free route, pay nothing for the value they receive, then complain about it.

Chris likes to think of this site and these forums as his virtual living room. He invites everyone in - even complete strangers - because he’s passionate about sharing his work and helping the community around him. He’s just that kind of guy. He serves free appetizers (this blog) to everyone with his compliments, and those who choose to make a financial contribution (enrolled membership) are invited into the dining room for a full meal (Insider and Martenson Reports).

There is absolutely nothing wrong with coming into the living room, staying there for years at a time, and just taking advantage of all the free appetizers. Chris doesn’t mind that at all, and he understands that some people are on a tight budget and can’t afford to join the party in the dining room. Fair enough. But if you’re going to avail yourself of this man’s hospitality and camp out in his living room, please don’t shit on the carpet, ok? Is that really too much to ask?

My abrupt reaction to sofitek was because I’m really getting sick of what I see as a growing trend of disresepct on this site. It always seems to come from the non-enrolled members, and it always seems to involve shitting on the carpet while whining about how unfair things are to those who choose not to ante up for enrolled membership.

Recently Chris was honored by being selected for a feature article in Boston Magazine, and a thread was put up announcing this milestone accomplishment. Regular contributors to the site immediately used the opportunity to congratulate Chris for this new level of recognition. Then some jerk showed up to shit on the carpet. He said he’d watched the CC over a year ago, but he had obviously made ZERO contribution to the site - the post in the Boston Mag thread was his first ever, so in a full year he’d never taken the time to submit an article or post interesting information or otherwise contribute to the community. Rather than join in the accolades and congratulate Chris on his well deserved recognition, this joker went on to gripe about the “haves and have-nots” and whine about how unfair it he thought it was that enrolled membership costs money. Give me a break! That’s like showing up at the party in Chris’ living room, insulting Becca (Chris’ wife), shitting on the carpet, and walking out. I have absolutely no respect for such entitled, self-righteous attitudes, and frankly I’m disappointed that Chris tolerates such nonsense in his home at all. If it were my website I’d just have deleted the guy’s account on the spot. Ping. Hasta la vista, whiner!

Look, we all have different interests and backgrounds, and we all come to this site for different reasons. I personally am an investor. That’s how I make my living, and I make no apology for the fact that the primary reason I’m here is to gain insight on financial markets from Chris’ perspectives on the economy. I personally don’t identify with the many people on the site who react to this information by focusing on building a rural homestead around a sustainability strategy. But do you see me showing up in the Permaculture or Transition Town threads calling people names or criticizing them for being hippies (or whatever)? Of course not! I respect my fellow site colleagues and I applaud them for taking action in the ways that make the most sense to them for their families. The “prepper threads” may not be my cup of tea, but I’m still glad they’re here and I applaud those who are focused on such things. Why in the world would I ever do something so rude and inappropriate as to criticize them just because “their thing” doesn’t happen to be “my thing”?

But there seems to be a double-standard on the site. While I’m sure nobody would tolerate something as absurd as a nay-sayer telling the preppers they are wrong to be prepping, a whole bunch of people seem to feel entitled to direcltly criticize and attack anyone - including Chris himself - who seeks to preserve their existing wealth or (heaven forbid) use the information on this site to enhance a for-profit investment strategy. For example, I recently penned an article about potential outcomes from the coming peak cheap oil shock. The vast majority of replies were very complimentary and flattering, but a few detractors just couldn’t resist adding a snide comment about how the article was somehow bad because it was “motivated by GREED” or somesuch drivel. I certainly welcome critical feedback on the substance of my writing, but attacking my motivations just because I choose to participate in the capitalist system I live in is just plain immature. Curiously, these disrespectful detractors never seem to be in the ranks of enrolled membership. It’s always the freeloaders looking for another excuse to shit on Chris’ living room carpet.

Is cause and effect really that hard to understand here, folks? I’m not a professional writer and have nothing to gain from posting articles here. That sort of BS just makes me want to post my future writings in the enrolled member-only area, just so I don’t have to listen to the whining from the freeloader section of Chris’ living room where all the brown stains are showing on Becca’s previously beautiful carpet. What many of you aren’t aware of is that I actually write two articles about Peak Oil, not one. I consciously made the decision not to post the 2nd article here (I quietly posted a link to the article on another site instead) because I’m sick of the entitled attitude of the whiners here.

This business of shitting on the carpet really does affect Chris in a big way. Frankly, I’m surprised he’s lasted this long. If it were me, I’d kick the freeloaders out, write off the carpet, and re-launch the site around a strategy that appeals more to paid subscribers and gives less away to freeloading carpet-stainers. So far Chris is still very dedicated to his current strategy, but if you guys keep this crap up he’ll eventually get sick of it and you’ll loose the free lunch so many of you have been enjoying here for years. Please think about that.

Gibber, I read your post three times and still can’t figure out exactly what your point is. You say you think I acted like a three year old. Ok, fine, that’s your perspective. But then elsewhere in the same post you say the primary reason you’re here in the first place is to read my posts. Did I get that right? Then you go on to make a big deal about how you turned off automatic renewal because of my response to sofitek, and you seem to be implying some sort of threat where I have to shape up and be nice to the whiners according to your standards, or else you’ll take your marbles and go home (cancel enrolled membership). Is that the idea? I’m seriously having a hard time following your point here.

Look, I admit that I snapped at sofitek. The reason is that I’m really getting sick of what I see as a growing trend - heck, let’s call it sofitek syndrome, where non-paying parasites just can’t resist shitting all over Dr. Martenson’s living room. I feel quite honored to be in his home at all, even though I’ve paid for the privilege. It really offends me to have my access to Chris’ insight threatened by others having the shockingly poor taste to shit on the carpet after being invited in for free. It’s not even so much that I’m offended by the behavior - after all it’s not my carpet. But when I put myself in Chris’ shoes, if I were him I’d just say “Ok, I’ve had enough of this crap” and kick everyone out of my house. I don’t want to be kicked out of Chris’ house because sofitek, Poet and others can’t comprehend the basic idea that when someone invites you into their home for free, it’s not appropriate to shit on their carpet or whine about how unfair it is that you didn’t get to taste everything the paying guests got to eat in the dining room. I view this behavior as a direct threat to my own continued access to Chris’ insight, and that’s why I take such great offense.

Gibber, if I’m reading you right, your intention here is to levy some sort of ultimatum that I have to change my tune or else you’ll get even by canceling your paid membership, as if to exact some sort of economic sanction on Chris because I (not Chris) had the audacity to object to people like sofitek shitting on the carpet. Dude, you can’t be serious! I’m officially calling your bluff, Gibber. I’m currently working on two new articles. One is a much deeper discussion of ways to own gold, how the london good delivery system works, etc. The other is called The Efficient Market Fallacy and will easily be my best writing to date. Gibber, you just persuaded me not to post either article on this site, despite the fact that Chris has invited me to put future articles on the main blog. Satisfied? Now your stated reason for staying has been taken away. So take your marbles and go home. Cancel your membership and get lost. As for your implied threat to punish Chris for my attidue by taking away your subscription revenue, I already voluntarily make financial contributions in excess of 10x the asking price for paid enrolled member status. I’ll ask Chris to allocate $300 of my last contribution to the Gibber-b-gone fund just to make sure he suffers no loss from your decision to leave. I’ll think of it as a donation to cleaning the carpets. Satisfied?

Folks, there’s an imporant point here and I hope some of you are getting it: The fact that I’m getting sick of the carpet staining syndrome and ready to just go elsewhere and stop posting on this site isn’t the part you should be worried about. You can do without me and my admittedly strong opinions and personality. But forget about me for a minute. What if Chris wises up and gets sick of this crap too? I don’t think you’ll be too happy if he decides enough is enough and decides to do something else with his life because sofitek syndrome got to him. He’s a much more mellow guy than I am, so I don’t think he’s there yet. But keep posting these whining complaints about how what you get for free isn’t generous enough, and you’ll eventually push him over the edge. Please give that scenario some serious thought.

All the best,

Erik

 

Perhaps we’re all a little stressed and need to take a step back. 
I think this calls for serious measures.  Drastic measures, even.  So with that in mind, here’s a fisheye lens photo of a hound dog wearing a devil cape and horns:

devil hound

Now we can share in at least one common bond… that pets in a fisheye lens are darn cute.  Gives us something to build from Laughing

  • Nick

LogansRun:
Trying to keep what you have is not very useful when society is going down the tubes. What you need to get are skills for adaptation and, possibly, tools to ease the transition. I guess that first of all, one needs to decide where to try to ride out the storm. Why do you want to keep what you have?
Denny:
I’d love to enrol and have considered it many times. However, NZ$430 is a lot of money, especially now as I have no income other than savings interest. What has always put me off is that many of the special articles highlighted on Chris’s blog don’t seem to be of enough relevance for me. I could try a month, I suppose but what if I find it too interesting? Then I’m NZ$430 a year worse off.
Xraymike79:
New Eco-villages seem to spring up all the time. I’m not in one but know of a few in New Zealand (where I live). Sorry I can’t point you at one.
Nickbert:
I can understand your position. But Chris’s article goes into a lot of detail. Everyman and his dog, in peak oil circles has been saying get into gold, for years. It’s old news. But it’s still a gamble, despite the four-fold increase in value (OK, with inflation, it might be somewhere between threefold and fourfold, but that doesn’t invalidate my point). I agree that until you know which direction to go, preserving your wealth is important, but I did that by putting my savings into reasonably secure banks that are backed by a government deposit guarantee. If you haven’t liquidated your wealth before collapse, will you be able to get at your gold and what will you be able to do with it?
SagerXX:
I’ve heard that there is useful information on the enrolled side and I’m now very tempted to at least take a look. But there is a lot of useful free information on the Net, also, including free forums frequented by folks who are also walking the talk. I might still take a look, though.
ao:
Sorry, but that’s just stupid and doesn’t follow at all from what I wrote.
Erik T:
See my responses above.
r:
That’s a thought. I guess I could enroll for one month and if I find it useful, enroll every other month. That would, at least, half the yearly cost. Thanks for the pointer.
Mark_BC:
We’re facing more than just economic collapse. I feel your pain, about not being able to discuss this with others. Finding someone with an open enough mind is very difficult.
Gibber:
Thanks.

Erik and others
Sheesh. 

Gibber, if I'm reading you right, your intention here is to levy some sort of ultimatum that I have to change my tune or else you'll get even by canceling your paid membership,
Nope.  More along the lines that while there had  been a vague feeling from time to time that I wasn't getting value as a paid subscriber, I was letting the subscription run. My credit card expired in April and I had to go in and set the new card up about 4 or 5 days ago to physically renew my subscription. I have had a feeling for some time that I should physically make the decision at each renewal to see whether I was still getting value. The exchange between yourself and sofitek tilted me that way. It is likely that I will renew in 3 months time. Lets be clear that its not an ultimatum. Its more along the lines of you being abusive to potential paid subscribers can be offensive to current subscribers and potential new subscribers.

You are opinionated. 

I like that. I like all your posts where you talk about economics.  I am in awe of your ability to parse the scenarios in front of you and explain them way better than I could ever attempt to.  I certainly don’t want you to change your tune there.

However, I like none of your posts where you discuss how whiny the non-paying members are. The carpet metaphor is an image I don’t need.

I don’t like seeing abuse. I saw abuse in your post and wrote a post to point out how I percieved your post.

Looks like we are going to disagree on the tenor of the posts. Put yourself in the shoes of a casual browser of this site and and you were trying to determine whether you should become a paid subscriber and saw the level of abuse in this thread. Speaking only for myself, I would want to follow the site a bit more to see if this was a one-off event or a pattern.

The message I am trying to send is

Your posts on finance and economics are fantastic and are a reason in themselves to become a paid subsciber

I prefer to visit sites where there is little abuse. If you had ignored sofiteks post then it would have died in cyberspace.

Will this thread in and of itself stop me from re-enrolling. Nope. It would be an additional item I would consider at the time. It wouldn’t be the prime consideration. The prime consideration would be the value i would be getting from Chris’s posts , you posts and other posts. Iif the site is having robust discussion without too much abuse then this set of posts isn’t going to be front of mind in 3 months time.

Is there an alternative approach to non-members who are posting in a way you don’t like? Like having a FAQ pointing out the pros and cons in a non-abusive way of enrolled Vs Paid subscriber. And point people who “whine” to that FAQ? 

Regards.

 

Well as a newbie here I can say these forums are very clean by most standards. I don’t think the issues being faced by this blog are any different than any other site on the internet (been to Zerohedge?). It’s the internet people… I think many people just need to get a thicker skin and move on and focus on the purpose of the site. I will probably join, and I really don’t care about offensive posts. I would join for the financial advice I recieve, not how nice everybody is. As I said … it’s the intenet! You can get all riled up but it won’t make any difference because … it’s the internet! I just won’t read those argumentative posts, or if I am in need of some entertainment I might read for a good chuckle. And look, here I have just wasted one more box with another post about this topic! Sorry.

As an investor, as well as someone becoming more aware of the big issues we face, I’d be interested to get back to the attraction or otherwise of gold. I currently hold around 6-7% of my wealth in the metal and there’s no question gold has had a stunning decade just as it did back in the 70’s when inflaiton fears were approaching panic-mode. However, warning bells sound when Chris sais;

This week saw gold break out to a new all-time high (although not in inflation-adjusted terms, which the mainstream media nearly always mentions, despite never running the same calculation for stocks):
The problem is that if you plot the long-term (so not just the last few years) performance of gold against stocks then gold is a very poor cousing once you factor in reinvestment of dividends. The importance of including divis is clear if you look at the work of, for example, Dimson et al or the annual Barclays equity-gilt study. So, yes, gold has beaten stocks recently, even with divis included, but that outperformance should IMO be viewed against the longer-term backdrop.

Bill Bonner (author of Empire of Debt and with similar views to Chris) makes a far bigger error of judgement when he posts (as he does) the performance of gold against stocks for the whole of the 20th century and leaves out dividends. Over such a long period the difference divis make is simply huge and gives a total return far in excess of gold, cash or bonds.

Another concern is one that always arises for me when an asset class has had a meteoric rise, especially if people point to this and extrapolate it into the future or god forbid start talking about a new paradigm or ‘this time it’s different’. There are too many examples of subsequent corrections or even crashes to be complacent - dotcom, Japanese stocks, US/UK housing, even tulips if you want to go back far enough!

Also whilst gold is an excellent hedge (think Iceland, Zim for recent examples) against local currency collpase I’m not sure the same logic applies to a truly Global situation (whilst conceding it has certainly had a good run so far). The problem is that the big debtor nations (US, UK, other Euro-zone countries, Japan) make up pretty much half the global economy whilst the creditors (sov wealth nations, China etc) make up the other half. I’m not sure the debtors can collapse without taking the creditors with them - a sort of Global example of the paradox of thrift! Alternatively, why not Remnibi or Norwegian Kronas instead of gold?

So if there is global financial melt-down what will you be able to buy with your gold? Always remebering that taxes have to be paid in local currencies (which is essentially what legitimises them) rather than gold. Gold may be a way of retaining wealth much as ownership of other assets can be but in a financial collpase scenario I’m not sure how it would work.

Thinking more broadly I’m not even sure that there are any investment strategies for dealing with global financial collapse becasue pretty much all forms of monetary investment (stocks, bonds, cash, commodities) are relant on the current societal infrastructure being maintained. If collpase happens then I’m probably with Sofistek in believing that individual skills and expertise may end up being more important than old World wealth. In some ways the investor part of me just accepts this and gets on with the investment part in the context in which it still matters. And continue to develop gardening skill sin case TSHTF! I see gold as more a part of the former than the latter.

 

Erik…great analogy.
Please consider posting the two new articles in the paid subscribers area.

With logic like that…it’s easier to understand your ignorant criticism of Chris.

For what it is worth I paid the yearly subscription and I find tremendous value in it.
There are many very knowledable contributors to this site and only a few that I see are complainers. I ignore the complainers and focus on the posts that have meaning for me. I would like to thank many people for taking the time to offer really quality content. Among these are Erik T, Machinehead, Dogs, Morpheus, Drkrbylv, Strabes and many others.

However, without Chris Martenson’s work none of this would exist so special thanks go to him and his family for letting me be part of this. There is much to learn and much to do to prepare for whatever comes.

 

Ken

 

Erik,
I couldn’t agree with you more.  But I wouldn’t waste any more breath on the matter.  The parties in question just don’t and won’t get it.  But this discussion has been healthy and hopefully will act as a recruiting tool for more subscribers for Chris.  If certain parties question the value of the subscription, their position, in my mind, affirms the exact opposite … that the subscription has considerable value.   

 

piquod12,

I always like to hear folks taking the opposite position on the gold issue.  And your position still seems to be the majority by far among the people that I’ve polled.  But I think you overestimate the value of dividends.  Obviously, many stocks don’t even pay dividends and dividend payments have shrunk for many stocks or even been discontinued.  Don’t fall for the Wall Street propaganda or their data (which often is tainted by various forms of manipulation).  Also, I don’t think anyone has said “This time it’s different” with gold.  It will revert to the mean just like everything else when its time comes.  However, while gold has been a wild ride, both the quantitative and qualitative sell indicators that I’ve established for myself have not yet manifested themselves.  Plus, when I look at the risks of stocks (dividend paying or not) vs. gold for the remainder of the year at least, it’s a no brainer for me.  That’s not to say that sometime in the future I won’t get into rare earth equities or the Turkish equity market or some other speculative equities area when we shift back into an equity supercycle but for now, no way.  And even if stocks go up in nominal terms, I doubt that in the near future, they will go up relative to gold.  YMMV.